ORA BANDA MINING LTD — Interim / Quarterly Report 2008

Feb 28, 2008

MONARCH GOLD MINING COMPANY LIMITED ABN 69 100 038 266

AND CONTROLLED ENTITIES

HALF YEAR FINANCIAL REPORT

31 DECEMBER 2007

CORPORATE DIRECTORY

BOARD OF DIRECTORS

Michael Kiernan Matthew Gill John Davis Ian Huitson Keith Vuleta David Humann Phillip Botsis

Chairman Managing Director Exploration Director Operations Director Finance Director Non-executive Director Non-executive Director

COMPANY SECRETARY

Patrick McCole

REGISTERED OFFICE

Level 1 23 Ventnor Avenue West Perth WA 6005

Telephone: (61 8) 9481 6422 Facsimile: (61 8) 9481 6433 E-mail: admin@monarchgold.com.au Web-site: www.monarchgold.com.au

SHARE REGISTRY

Computershare Investor Services Pty Ltd Level 2 45 St George's Terrace Perth WA 6000

Telephone: (618) 9323 2000 Facsimile: (61 8) 9323 2033 E-mail: perth.services@computershare.com.au www.computershare.com.au Web-site:

AUDITOR

PricewaterhouseCoopers

SOLICITORS Pullinger Readhead Lucas

BANKER

National Australia Bank Limited

STOCK EXCHANGE LISTING

Shares in Monarch Gold Mining Company Limited are quoted on Australian Securities Exchange Limited. (ASX code: MON) and the Dubai International Financial Exchange Limited (DIFX code: MON)

CONTENTS

Directors' report
Auditor's independence declaration4
Consolidated income statement
Consolidated balance sheet
Consolidated statement of changes in equity7
Consolidated cash flow statement
Notes to the consolidated financial statements9
Directors declaration
Independent auditor's review report 17

DIRECTORS' REPORT

The directors of Monarch Gold Mining Company Limited ("Monarch" or "parent entity") present their report on the results and state of affairs of the consolidated entity (consisting of Monarch and the entities it controlled) for the halfyear ended 31 December 2007.

DIRECTORS

The following persons were directors of Monarch during the whole of the half-year and up to the date of this report, unless otherwise stated:

Michael Kiernan Matthew Gill (appointed 12 November 2007) John Davis lan Huitson Keith Vuleta David Humann Philip Botsis Allan Quadrio (resigned 25 January 2008) John McKee (resigned 16 November 2007) David Macoboy (resigned 1 July 2007) Michael Etheridge (resigned 30 July 2007)

PRINCIPAL ACTIVITIES

During the half year ended 31 December 2007 the principal activities of the consolidated entity were the mineral exploration, development, mining, processing and sale of gold bullion.

RESULTS OF OPERATIONS

The net loss of the consolidated entity for the half year ended 31 December 2007 after provision for income tax was \$17.7 million (31 December 2006: loss of \$4.3 million).

REVIEW OF OPERATIONS

$\mathbf{1}$ Corporate

Monarch acquired the Riverina Gold project from Riverina Resources Pty Ltd and Barra Resources Ltd, containing resources of 200,000 ounces of gold.

Monarch is also expanding its landholding with the acquisition of the Mount Magnet Gold Operations from Harmony, a project comprising a gold resource of 2.7 million ounces, a ground package of 330 tenements covering approximately 1,100 square kilometres and a 2.7mtpa capacity gold processing facility.

During December 2007 there was a consolidation of Monarch's securities on the basis that every three shares were consolidated into one share and every three options to acquire a share were consolidated into one option to acquire a share.

The resulting issued capital of Monarch as at 31 December 2007 is 159,194,165 ordinary shares and 14,883,344 options to acquire shares.

$2.$ Operations

During the period, the Davyhurst Mill refurbishment was successfully completed, commissioned and gold bullion production commenced with operational reliability being achieved. Gold recoveries improved to 92.3% by 31 December 2007.

The start-up pit – Walhalla – proved to be a disappointment grade-wise, resulting in Monarch revising its Mine Plan to focus away from the Walhalla Pit, with the higher grade Missouri and Sandking Pits being prepared, and the Riverina Prospect returning encouraging results to support early mining.

Monarch intersected high grade gold ore on 6 Level and 7 Level at the Mt Ida gold project at the Baldock lode. Four sub-levels were established on ore on 6 Level.

Davyhurst Summary of Production

			July-Dec 07
Mining	Total Movement	BCMs	1,351,567
	Ore Tonnes	T	232,352
Processing	Tonnes Crushed	T	332,793
	Tonnes Milled	T	316,047
	Mill Feed Grade	$g/t$ Au	1.25
	Gold Recovered	Oz	11,361
	Gold Poured	Oz	10,922

$3.$ Exploration

• Monarch continued the extensive exploration drilling programme as part of the 2008 Exploration Budget for the Davyhurst project with 48,110 metres of RAB and 21,965 metres of RC drilling completed during the period.
• At the Davyhurst Gold project RC drilling programmes were completed at the Walhalla, Federal Flag, Salmon Gums and Mt Banjo prospects on the Round Dam trend and at the Iguana prospect at the Lady Ida mining centre. Encouraging results were reported and are currently being followed up.
• Also at Davyhurst, RC drilling concentrated on the prospective Riverina Project. Encouraging results from within the optimized Pit area and outside this area were reported and give confidence to an extension to the size of the original Pit design.

Equity Raisings 4.

During the half year Monarch raised equity capital of \$11,247,967 (net of costs) through;

• 1) a share placement of 45,000,000 fully paid shares at an issue price of 26 cents per share;
• the issue of 4,412,500 fully paid shares at an issue price of 25 cents per share further to a Share Purchase $2)$ Plan and non-renounceable entitlement issue and as approved by shareholders on 14 August 2007; and
• 3) the exercise of 350,000 options.

AUDITOR'S INDEPENDENCE DECLARATION

A copy of the auditors' independence declaration as required under Section 307C of the Corporations Act 2001 is included immediately following the Directors' Report and forms part of the Directors' Report.

EVENTS SUBSEQUENT TO THE END OF THE HALF YEAR

Significant events which have occurred subsequent to the end of the half year are contained in Note 7 to the financial report.

ROUNDING OF AMOUNTS

The company is of a kind referred to in Class Order 98/0100, issued by the Australian Securities and Investments Commission, relating to the "rounding off" of amounts in the directors' report and financial report. Amounts in the directors' report and financial report have been rounded off to the nearest thousand dollars in accordance with that Class Order.

This report is made in accordance with a resolution of directors.

Matthew Gill Managing Director

Perth, Western Australia 28 February 2008

PRICEWATERHOUSE COPERS &

PricewaterhouseCoopers ABN 52 780 433 757

0.25 250 St Georges Tetrace GPO Box 0198 PERTH WA 6840 DX 77 Perth DA 71 Ports
Australia
Telephone +61 8 9238 3000 Facsimto +61 8 9238 3099 www.pwc.com/su

Auditor's Independence Declaration

As lead auditor for the review of Monarch Gold Mining Company Limited for the half year ended 31 December 2007, I declare that to the best of my knowledge and belief, there have been:

• a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and
• b) no contraventions of any applicable code of professional conduct in relation to the review.

This declaration is in respect of Monarch Gold Mining Company Limited and the entities it controlled during the period.

Peter Buchholz

Partner PricewaterhouseCoopers

Perth 28 February 2008

Liability imited by a scheme approved under Professional Standards Legislation

CONSOLIDATED INCOME STATEMENT FOR THE HALF YEAR ENDED 31 DECEMBER 2007

	CONSOLIDATED
	Notes	31.12.07 \$'000s	31.12.06 \$2000s
Revenue from continuing operations		8,679	65
Other income	3	1,578	103
Changes in inventories of ore, gold in circuit and gold on hand		2,803
Operating mine costs		(24, 454)
Depreciation and amortisation		(1, 408)	(159)
Administration		(4, 543)	(3,435)
Finance costs		(315)	(92)
Write-down to market value of "available for sale" investments			(749)
Loss before income tax		(17,660)	(4,267)
Income tax expense
Loss for the half-year		(17,660)	(4,267)
Loss is attributable to:
Equity holders of Monarch Gold Mining Company Limited Minority interest		(17,660)	(4, 267)
		(17,660)	(4, 267)
		Cents	Cents
Earnings per share for profit attributable to the ordinary equity
holders of the company:		(4.09)	(1.78)
Basic earnings/(loss) per share
Diluted earnings/(loss) per share		(4.09)	(1.78)

The above consolidated income statement should be read in conjunction with the accompanying notes.

CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2007

		CONSOLIDATED
	NOTE	31.12.07 \$'000s	30.06.07 \$'000s
CURRENT ASSETS
Cash and cash equivalents		1,478	21,750
Trade and other receivables		4,981	494
Inventories		3,305	33
Prepayments		253	158
Other financial assets		136	62
TOTAL CURRENT ASSETS		10,153	22,497
NON-CURRENT ASSETS
Trade and other receivables		32
Other financial assets		2,061	2,604
Property, plant and equipment		16,536	12,745
Mine properties		1,408
Deferred exploration expenditure		57,058	40,996
TOTAL NON-CURRENT ASSETS		77,095	56,345
TOTAL ASSETS		87,248	78,842
CURRENT LIABILITIES
Trade and other payables		12,410	13,567
Borrowings	$\overline{4}$	10,549	489
Provisions		319	355
TOTAL CURRENT LIABILITIES		23,278	14,411
NON-CURRENT LIABILITIES
Borrowings		2,172	1,302
Provisions		3,348	3,348
TOTAL NON-CURRENT LIABILITIES		5,520	4,650
TOTAL LIABILITIES		28,798	19,061
NET ASSETS		58,450	59,781
EQUITY
Contributed equity	5	119,223	103,800
Reserves		4,236	3,330
Accumulated losses		(65, 051)	(47, 391)
Parent entity interest		58,408	59,739
Minority interests		42	42
TOTAL EQUITY		58,450	59,781

The above consolidated balance sheet should be read in conjunction with the accompanying notes.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF YEAR ENDED 31 DECEMBER 2007

	Attributable to members of Monarch Gold Mining Company Limited				Minority interests	Total equity
Consolidated	Contributed equity \$'000s	Reserves \$'000s	Accumulated losses \$'000s	Total \$'000s	\$'000s	\$'000s
At 1 July 2006	55,757	1,662	(22,070)	35,349	42	35,391
Loss for the period			(4,267)	(4,267)		(4,267)
Total recognised income and expense for the half-year			(4,267)	(4, 267)		(4,267)
Contributions of equity, net of transaction costs	13,785			13,785		13,785
Employee and director share options - value of services		731		731		731
At 31 December 2006	69,542	2,393	(26, 337)	45,598	42	45,640
At 1 July 2007 Effect of prior period adjustment	103,800	3,330	(48, 419) 1,028	58,711 1,028	42	58,753 1,028
	103,800	3,330	(47, 391)	59,739	42	59,781
Loss for the period			(17,660)	(17,660)		(17,660)
Total recognised income and expense for the half-year			(17,660)	(17,660)		(17,660)
Contributions of equity, net of transaction costs	15,423			15,423		15,423
Employee and director share options - value of services		906		906		906
At 31 December 2007	119,223	4,236	(65,051)	58,408	42	58,450

CONSOLIDATED CASH FLOW STATEMENT FOR THE HALF YEAR ENDED 31 DECEMBER 2007

	CONSOLIDATED
	31.12.07 \$'000s	31.12.06 \$'000s
Cash flows from operating activities
Receipts from customers (inclusive of goods and services tax)	8,771	195
Payments to suppliers and employees
(inclusive of goods and services tax)	(25, 335)	(2,068)
Interest received	167	65
Interest paid	(197)
Net cash outflow from operating activities	(16, 594)	(1, 808)
Cash flows from investing activities
Proceeds from sale of fixed assets	4,728
Payments for mineral exploration expenditure	(20, 016)	(6,016)
Payments for purchase of mineral interests	(1, 971)
Payments for purchase of plant and equipment	(6,219)	(532)
Payment for other financial assets	(75)	(2,630)
Net cash outflow from investing activities	(23, 553)	(9,178)
Cash flows from financing activities
Proceeds from issues of shares	12,430	14,052
Payments for share issue expenses	(1,183)	(787)
Proceeds from borrowings	9,500
Repayment of finance lease principal	(255)
Loans advanced to other parties	(617)	(497)
Net cash inflow from financing activities	19,875	12,768
Net increase in cash held	(20, 272)	1,782
Cash at the beginning of the financial period	21,750	804
Cash at the end of the financial period	1,478	2,587

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2007

BASIS OF PREPARATION OF HALF-YEAR REPORT 1.

This general purpose financial report for the interim half-year reporting period ended 31 December 2007 has been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001.

This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2007 and any public announcements made by Monarch Gold Mining Company Limited during the interim reporting period in accordance with continuous disclosure requirements of the Corporations Act 2001.

Except as noted below, the accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period:

Revenue $\left($ .)

Gold and silver sales

Amounts are recognised as sales revenue when there has been a transfer of risk to a customer, and:

• the gold is in a form suitable for delivery and no further processing is required by, or on behalf of, the consolidated entity;
• the quantity, quality and selling price of the gold or silver can be determined with reasonable accuracy; and
• the gold or silver has been despatched to the metals refinery and is no longer under the physical control of the consolidated entity, or the metals refinery has formally acknowledged legal ownership of the product, including all inherent risks.

$(ii)$ Inventories

Ore and Gold stocks are valued at the lower of cost and net realisable value.

Cost comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure relating to mining activities, the latter being allocated on the basis of normal operating capacity. Costs are assigned to individual items of inventory on the basis of weighted average costs. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.

Going Concern

As at 31 December 2007, the consolidated entity has a working capital deficiency of \$13,125,006. The consolidated entity has also recorded operating losses and negative cash flows during the half year ending 31 December 2007.

The ability of the consolidated entity to continue to fulfil its mineral project evaluation, mine development and operational activities and hence the continued adoption of the going concern assumption, is dependent on the Company raising additional funding as and when required. In the forthcoming period, the consolidated entity expects to continue its mineral project evaluation, mine development and operational activities.

The financial statements have been prepared on a going concern basis which assumes that the company and the consolidated entity will continue to meet its commitments and can therefore continue normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business. In arriving at this position, the directors have considered the following pertinent matters:

• Available cash reserves; $\bullet$
• Cash flow from full ramp up of mining operations at the Davyhurst and Mt Ida mines; and $\bullet$
• The directors are assessing various options for the raising of additional funds including equity raisings. $\bullet$

2. SEGMENT INFORMATION

The consolidated entity operates in one business and geographical segment, being mineral exploration in Western Australia and all of the assets of the consolidated entity are deployed for these purposes.

	31.12.07 \$000	31.12.06 \$3000
INCOME AND EXPENSES 3 1 Gain on sale of plant and equipment	1.578 ________	103

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2007

4. TRADE AND OTHER PAYABLES

Trade and other payables includes loans from other entities of \$9,500,000 on commercial terms

		31.12.07 Shares	31.12.06 Shares	31.12.07 \$'000	31.12.06 \$'000
5.	EQUITY SECURITIES ISSUED
	Movements in ordinary shares on issue during the half-year:
	Exercise of options under employee share ownership plan Part consideration for acquisition of Riverina	350,000	15,358,625	70,000	3,071,722
	Gold Project tenements	15,000,000		3,675,000
	Share placements	45,000,000	50,000,000	11,700,000	11,500,000
	Share purchase plan	2,000,000		500,000
	Entitlements issue	2,412,500		603,125
	1 for 3 share consolidation 1	(318, 382, 810)
	Share issue costs			(1, 125, 158)	(787, 336)
		(253, 420, 310)	65,358,625	15,422,967	13,784,386
		31.12.07 Options	31.12.06 Options
	Movements in share options on issue during the
	half-year:
	Share-based payments	2,500,000	12,500,000
	Exercise of options under employee share ownership plan	(350,000)	(15,358,625)
	Part consideration for acquisition of Riverina	5,000,000
	Gold Project tenements Options cancelled	(1,000,000)
	1 for 3 share consolidation 1	(29, 766, 663)
		(23, 616, 663)	(2,858,625)

$\mathbf{I}$ A reorganisation of capital was undertaken on 18 December 2007 on the basis that every 3 ordinary shares in the capital of the Company were consolidated into one ordinary share and every three options to acquire a share were consolidated into one option to acquire a share.

6. CONTINGENT LIABILITIES

There have been no changes in any contingent liabilities of the consolidated entity since the last annual reporting date.

EVENTS OCCURRING AFTER THE BALANCE SHEET DATE $7.$

• (i) On 4 February 2008 Monarch Gold Mining Company Ltd finalised and signed the share sale agreement for the purchase of the Mount Magnet Gold operations for \$65 million to be satisfied by the payment of \$30 million in cash and the issue of \$20 million fully paid ordinary shares and \$15 million convertible note. Monarch will take possession on 1 April 2008 and the purchase process is due for completion on 30 June 2008.
• On 15 February 2008 Monarch Gold Mining Company Ltd announced a \$10 million placement of 20 million shares at $(ii)$ 50 cents per share.

CORRECTION OF PRIOR PERIOD ERROR 8.

Mining costs for the year ending 30 June 2007 were overstated by \$1,028,698. This error had the effect of overstating the 30 June 2007 retained losses and understating deferred exploration expenditure.

The amount of the correction for both basic and diluted earnings per share was a reduction of 0.39 cents per share.

DIRECTORS' DECLARATION

In the directors' opinion:

• the financial statements and notes set out on pages 5 to 10 are in accordance with the Corporations Act 2001, $(a)$ including:
• (i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and
• (ii) give a true and fair view of the consolidated entity's financial position as at 31 December 2007 and of its performance for the half year ended on that date; and
• based upon the reasons set out in Note 1 to the financial report, there are reasonable grounds to believe that $(b)$ Monarch Gold Mining Company Limited will be able to pay its debts as and when they become due and payable.

This declaration has been made in accordance with a resolution of the directors.

Matthew Gill Managing Director

Perth, Western Australia 28 February 2008

PriceWATERHOUsECOPERS ®

INDEPENDENT AUDITOR'S REVIEW REPORT to the members of Monarch Gold Mining Company Limited

PricewaterhouseCoopers ABN 52 780 433 757

OV1 250 St Georges Terrace PERTH WA 6000 GPO Box 0198 PERTH WA 6840 DX 77 Perth Adstratia Telephone +61 8 9238 3000 Faccimile +61 8 9238 3999 WWW.EAVC.CORMEU

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of Monarch Gold Mining Company Limited, which comprises the balance sheet as at 31 December 2007, and the income statement, statement of changes in equity and cash flow statement for the half-year ended on that date. other selected explanatory notes and the directors' declaration for the Monarch Gold Mining Company Limited group (the consolidated entity). The consolidated entity comprises both Monarch Gold Mining Company Limited (the Company) and the entities it controlled during that half-year.

Directors' Responsibility for the Half-Year Financial Report

The directors of the Company are responsible for the preparation and fair presentation of the half-year financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of the half-year financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor's Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of an Interim Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the financial report is not in accordance with the Corporations Act 2001 including: giving a trae and fair view of the consolidated entity's financial position as at 31 December 2007 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of Monarch Gold Mining Company Limited, ASRE 2410 requires that we comply with the cthical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. It also includes reading the other information included with the financial report to determine whether it contains any material inconsistencies with the financial report. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Ligbilly limited by a scheme approved under Professional Standards Legislation

PRICEWATERHOUSE COPERS &

For farther explanation of a review, visit our website http://www.pwc.com/au/financialstatementaudit.

While we considered the effectiveness of management's internal controls over financial reporting when determining the nature and extent of our procedures, our review was not designed to provide assurance on internal controls.

Our review did not involve an analysis of the prudence of business decisions made by directors or management.

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001.

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Monarch Gold Mining Company Limited is not in accordance with the Corporations Act 2001 including:

(a) giving a true and fair view of the consolidated entity's financial position as at 31 December 2007 and of its performance for the half-year ended on that date; and

(b) complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations 2001.

t
LethouseCoopers

Peter Buchholž Partner

Perth 28 February 2008